Teva Pharmaceuticals Overtakes Key Level Post-Earnings

Call options have been flying off the shelves

by Emma Duncan

Published on Feb 12, 2020 at 2:16 PM

Drug concern Teva Pharmaceutical Industries Ltd (NYSE:TEVA) is enjoying an 8.6% surge in this afternoon's trading, last seen at $13.39, nearly filling its mid-May bear gap. Igniting today's outperformance is the company's better-than-expected fourth-quarter report, a byproduct of its two-year restructuring program. Teva also said it expects large growth in its migraine drug Ajovy and Huntington's drug Austedo in 2020. 

Long-term growth was cited as the company's biggest asset, too, and looks like it's already being accomplished across the board. Jan. 15 the equity overtook its 200-day moving average for the first time since late-2018, and now sports a six-month gain of 113%. 

Daily TEVA with 200MA

In response to today's post-earnings buzz, call traders are making big moves in the options pits. So far 136,000 calls have been trading, twice the expected rate, and more than triple the amount of puts. Most popular are the February 12 and 12.50 calls, with over 24,000 contracts across the tape so far. 

There does, however, remain plenty of room for improvement on the equity. Coming into today, 17 of 22 following analysts sport a "hold," "sell," or "strong sell" recommendation. The stock also sports an average 12-month price target of $8.50, a 37% deficit to current levels. In simpler terms, Teva Pharmaceuticals stock is well overdue for a fresh round of upgrades and/or price-target hikes.

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